8814 Parents� Election To Report Child�s Interest and Dividen

2007 Form 8814
Parent’s Election To Report Child’s Interest and Dividends

Purpose:

This is the first circulated draft of the 2007 Form 8814 for your
review and comments.

TPCC Meeting:

None, but may be arranged if requested.

Prior Version:

The 2006 Form 8814 can be viewed by clicking on the following
link:
http://www.irs.gov/pub/irs-pdf/f8814.pdf

Other Products:

Circulations of draft tax forms, instructions, notices, and
publications are posted at:
http://taxforms.web.irs.gov/draft_products.html

Comments:

Please email, fax, call, or mail any comments by May 23rd, 2007.

Robert G. Black
Tax Law Specialist
Tax Forms and Publications
SE:W:CAR:MP:T:I:P

Email: [email protected]
Phone: (202) 283-6634
Fax:
(202) 283-1000

Explanation of Major Changes to Form 8814
•
•

Updated years as appropriate.
The applicable dollar amounts were updated per Rev. Proc. 2006-53.

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transmitted all R
text files for this
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Date

Form

I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
FORM 8814, PAGE 1 OF 4
MARGINS; TOP 13mm (1/2"), CENTER SIDES. PRINTS: HEAD TO HEAD
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 216mm (8-1/2") x 279mm (11")
PERFORATE: None
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

8814

Department of the Treasury
Internal Revenue Service

Name(s) shown on your return

Action

Date

O.K. to print
Revised proofs
requested

OMB No. 1545-0074

Parents’ Election To Report
Child’s Interest and Dividends

2007

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©

©

Signature

See instructions.
Attach to parents’ Form 1040 or Form 1040NR.

Attachment
Sequence No.

40

Your social security number

Caution. The federal income tax on your child’s income, including qualified dividends and capital gain distributions, may be less
if you file a separate tax return for the child instead of making this election. This is because you cannot take certain tax benefits
that your child could take on his or her own return. For details, see Tax benefits you cannot take on page 2.
A

Child’s name (first, initial, and last)

C

If more than one Form 8814 is attached, check here

Part I

B Child’s social security number

Child’s Interest and Dividends To Report on Your Return

1a Enter your child’s taxable interest. If this amount is different from the amounts shown on the
child’s Forms 1099-INT and 1099-OID, see the instructions
b Enter your child’s tax-exempt interest. Do not include this
1b
amount on line 1a
2a Enter your child’s ordinary dividends, including any Alaska Permanent Fund dividends. If your
child received any ordinary dividends as a nominee, see the instructions
b Enter your child’s qualified dividends included on line 2a. See the
2b
instructions
3
4

5
6

7
8
9
10
11
12

Enter your child’s capital gain distributions. If your child received any capital gain distributions
as a nominee, see the instructions
Add lines 1a, 2a, and 3. If the total is $1,700 or less, skip lines 5 through 12 and go to line 13.
If the total is $8,500 or more, do not file this form. Your child must file his or her own return
to report the income
Base amount
Subtract line 5 from line 4
If both lines 2b and 3 are zero or blank, skip lines 7 through 10, enter -0- on line 11, and
go to line 12. Otherwise, go to line 7.
Divide line 2b by line 4. Enter the result as a decimal (rounded
.
7
to at least three places)
Divide line 3 by line 4. Enter the result as a decimal (rounded to
.
8
at least three places)
Multiply line 6 by line 7. Enter the result here. See the instructions
9
for where to report this amount on your return
Multiply line 6 by line 8. Enter the result here. See the instructions
10
for where to report this amount on your return
Add lines 9 and 10
Subtract line 11 from line 6. Include this amount in the total on Form 1040, line 21, or Form
1040NR, line 21. In the space next to line 21, enter “Form 8814” and show the amount. If you
checked the box on line C above, see the instructions. Go to line 13 below

Part II

©

1a

2a

3

4
5
6

1,700

00

11

12

Tax on the First $1,700 of Child’s Interest and Dividends

13
850 00
Amount not taxed
14
Subtract line 13 from line 4. If the result is zero or less, enter -0Tax. Is the amount on line 14 less than $850?
15
No. Enter $85 here and see the Note below.
Yes. Multiply line 14 by 10% (.10). Enter the result here and see the Note below.
Note. If you checked the box on line C above, see the instructions. Otherwise, include the amount from line 15 in the tax you enter
on Form 1040, line 44, or Form 1040NR, line 41. Be sure to check box a on Form 1040, line 44, or Form 1040NR, line 41.
13
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15

For Paperwork Reduction Act Notice, see page 3.

%

Cat. No. 10750J

Form

8814

(2007)

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I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
FORM 8814, PAGE 2 of 4
MARGINS: TOP 13mm (1⁄ 2 "), CENTER SIDES. PRINTS: HEAD to HEAD
PAPER: WHITE, WRITING, SUB. 20 ^INK: BLACK
FLAT SIZE: 216mm (81⁄ 2 ") 3 279mm (11")
PERFORATE: (NONE)
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 8814 (2007)

General Instructions
Purpose of Form
Use this form if you elect to report your
child’s income on your return. If you do,
your child will not have to file a return.
You can make this election if your child
meets all of the following conditions.
● The child was under age 18 at the end
of 2007. (A child born on January 1,
1990, is considered to be age 18 at the
end of 2007. You cannot make this
election for such a child.)
● The child’s only income was from
interest and dividends, including capital
gain distributions and Alaska Permanent
Fund dividends.
● The child’s gross income for 2007 was
less than $8,500.
● The child is required to file a 2007 return.
● The child does not file a joint return for
2007.
● There were no estimated tax payments
for the child for 2007 (including any
overpayment of tax from his or her 2006
return applied to 2007 estimated tax).
● There was no federal income tax
withheld from the child’s income.
You must also qualify. See Parents who
qualify to make the election below.
How to make the election. To make
the election, complete and attach
Form(s) 8814 to your tax return and file
your return by the due date (including
extensions). A separate Form 8814 must
be filed for each child whose income
you choose to report.
Parents who qualify to make the
election. You qualify to make this
election if you file Form 1040 or Form
1040NR and any of the following apply.
● You are filing a joint return for 2007
with the child’s other parent.
● You and the child’s other parent were
married to each other but file separate
returns for 2007 and you had the higher
taxable income.
● You were unmarried, treated as
unmarried for federal income tax
purposes, or separated from the child’s
other parent by a divorce or separate
maintenance decree. The child must
have lived with you for most of the year
(you were the custodial parent). If you
were the custodial parent and you
remarried, you can make the election on
a joint return with your new spouse. But
if you and your new spouse do not file a
joint return, you qualify to make the
election only if you had higher taxable
income than your new spouse.

Page

Note. If you and the child’s other parent
were not married but lived together
during the year with the child, you
qualify to make the election only if you
are the parent with the higher taxable
income.
Tax benefits you cannot take. If you
elect to report your child’s income on
your return, you cannot take any of the
following deductions that your child
could take on his or her own return.
● Standard deduction of $2,150 for a
blind child.
● Penalty on early withdrawal of child’s
savings.
● Itemized deductions such as child’s
investment expenses or charitable
contributions.
If your child received qualified
dividends or capital gain distributions,
you may pay up to $42.50 more tax if you
make this election instead of filing a
separate tax return for the child. This is
because the tax rate on the child’s
income between $850 and $1,700 is 10%
if you make this election. However, if you
file a separate return for the child, the tax
rate may be as low as 5% because of the
preferential tax rates for qualified
dividends and capital gain distributions.
If any of the above apply to your child,
first figure the tax on your child’s income
as if he or she is filing a return. Next,
figure the tax as if you are electing to
report your child’s income on your return.
Then, compare the methods to determine
which results in the lower tax.
Alternative minimum tax. If your child
received tax-exempt interest (or
exempt-interest dividends paid by a
regulated investment company) from
certain private activity bonds, you must
take this into account in determining if
you owe the alternative minimum tax.
This type of interest should be shown in
box 9 of Form 1099-INT. See Form 6251,
Alternative Minimum Tax—Individuals,
and its instructions for details.
Investment interest expense. Your
child’s income (other than qualified
dividends, Alaska Permanent Fund
dividends, and capital gain distributions)
that you report on your return is
considered to be your investment income
for purposes of figuring your investment
interest expense deduction. If your child
received qualified dividends, Alaska
Permanent Fund dividends, or capital
gain distributions, see Pub. 550,
Investment Income and Expenses, to
figure the amount you can treat as your
investment income.

2

Foreign accounts and trusts. Complete
Schedule B (Form 1040), Part III, for your
child if he or she (a) had a foreign
financial account or (b) received a
distribution from, or was the grantor of,
or transferor to, a foreign trust. If you
answer “Yes” to either question, you
must file this Schedule B with your return.
Enter “Form 8814” next to line 7a or line
8, whichever applies. Also, complete line
7b if applicable.
Change of address. If your child filed a
return for a previous year and the
address shown on the last return filed is
not your child’s current address, be sure
to notify the IRS, in writing, of the new
address. To do this, you may use Form
8822, Change of Address.
Additional information. See Pub. 929,
Tax Rules for Children and Dependents,
for more details.

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Line Instructions

Name and social security number. If
filing a joint return, include your spouse’s
name but enter the social security
number of the person whose name is
shown first on the return.
Line 1a. Enter all taxable interest income
your child received in 2007. Do not
include tax-exempt interest in the total
for line 1a, but be sure to include it on
line 1b.
If your child received, as a nominee,
interest that actually belongs to another
person, enter the amount and “ND” (for
nominee distribution) on the dotted line
next to line 1a. Do not include amounts
received as a nominee in the total for
line 1a.
If your child had accrued interest that
was paid to the seller of a bond,
amortizable bond premium (ABP) allowed
as a reduction to interest income, or if
any original issue discount (OID) is less
than the amount shown on your child’s
Form 1099-OID, enter the nontaxable
amount on the dotted line next to line 1a
and “Accrued interest,” “ABP
adjustment,” or “OID adjustment,”
whichever applies. Do not include any
nontaxable amounts in the total for
line 1a.
Line 1b. If your child received any taxexempt interest income, such as from
certain state and municipal bonds, report
it on line 1b. Tax-exempt interest should
be shown in box 8 of Form 1099-INT.
Also include any exempt-interest
dividends your child received as a
shareholder in a mutual fund or other
regulated investment company. Those
amounts should also be shown in box 8
of Form 1099-INT.

(continued)

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I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
FORM 8814, PAGE 3 of 4 (page 4 is blank)
MARGINS: TOP 13mm (1⁄ 2 "), CENTER SIDES. PRINTS: HEAD to HEAD
PAPER: WHITE, WRITING, SUB. 20 ^INK: BLACK
FLAT SIZE: 216mm (81⁄ 2 ") 3 279mm (11")
PERFORATE: (NONE)
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 8814 (2007)

Note. If line 1b includes tax-exempt
interest or exempt-interest dividends paid
by a regulated investment company from
private activity bonds, see Alternative
minimum tax on this page.
Line 2a. Enter the ordinary dividends
your child received in 2007. Ordinary
dividends should be shown in box 1a of
Form 1099-DIV. Also include ordinary
dividends your child received through a
partnership, an S corporation, or an
estate or trust.
If your child received, as a nominee,
ordinary dividends that actually belong to
another person, enter the amount and
“ND” on the dotted line next to line 2a.
Do not include amounts received as a
nominee in the total for line 2a.
Line 2b. Enter all qualified dividends
your child received in 2007. Qualified
dividends are the ordinary dividends that
are eligible for the same lower tax rate
as a net capital gain. Qualified dividends
should be shown in box 1b of Form
1099-DIV.
Line 3. Enter the capital gain
distributions your child received in 2007.
Capital gain distributions should be
shown in box 2a of Form 1099-DIV.
If your child received, as a nominee,
capital gain distributions that actually
belong to another person, enter the
amount and “ND” on the dotted line next
to line 3. Do not include amounts
received as a nominee in the total for
line 3.

Page

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Line 9. Include this amount on Form
1040, lines 9a and 9b, or Form 1040NR,
lines 10a and 10b. On the dotted lines
next to those lines, enter “Form 8814”
and this amount (unless you file
Schedule B (Form 1040); in that case,
follow the instructions in the following
Note).
Note. If this amount plus the parents’
dividends is more than $1,500, report
this amount on Schedule B (Form 1040).
Show it as from “Form 8814.”
Line 10. Include this amount on
Schedule D, line 13; Form 1040, line 13;
or Form 1040NR, line 14. Enter “Form
8814” and this amount on the dotted
line next to line 13 of Schedule D or in
the space to the left of line 13 of Form
1040 or line 14 of Form 1040NR.
If any of the child’s capital gain
distributions were reported on Form
1099-DIV as unrecaptured section 1250
gain, section 1202 gain, or collectibles
(28%) gain, see Pub. 929 for details on
the amount to report on Schedule D.
Line 12. If you checked the box on line
C, add the amounts from line 12 of all
your Forms 8814. Include this amount
on Form 1040, line 21, or Form 1040NR,
line 21, whichever applies. Enter “Form
8814” and the total of the line 12
amounts in the space next to
line 21.

3

Line 15. If you checked the box on line
C, add the amounts from line 15 of all
your Forms 8814. Include the total on
Form 1040, line 44, or Form 1040NR, line
41. Be sure to check box a on that line.
Paperwork Reduction Act Notice. We
ask for the information on this form to
carry out the Internal Revenue laws of
the United States. You are required to
give us the information. We need it to
ensure that you are complying with
these laws and to allow us to figure and
collect the right amount of tax.
You are not required to provide the
information requested on a form that is
subject to the Paperwork Reduction Act
unless the form displays a valid OMB
control number. Books or records
relating to a form or its instructions must
be retained as long as their contents
may become material in the
administration of any Internal Revenue
law. Generally, tax returns and return
information are confidential, as required
by Internal Revenue Code section 6103.
The average time and expenses
required to complete and file this form
will vary depending on individual
circumstances. For the estimated
averages, see the instructions for your
income tax return.
If you have suggestions for making
this form simpler, we would be happy to
hear from you. See the instructions for
your income tax return.